State Farm Test

“Arbitrary and capricious” action is a core Administrative Procedure Act standard courts use to invalidate agency decisions that lack a rational explanation or ignore important evidence. Key U.S. Supreme Court precedents—including *Motor Vehicle Manufacturers Ass’n v. State Farm* and *FCC v. Fox Television Stations*—require reasoned decisionmaking and a record-based justification. This article summarizes the leading […]

Technology regulations are frequently overturned when agencies can’t justify them with a clear, evidence-based record under the Administrative Procedure Act’s “arbitrary and capricious” standard. Recent litigation has heightened scrutiny of how regulators assess risks, costs, and alternatives in fast-moving tech markets. This article explains the legal test, common vulnerabilities in tech rulemaking, and strategies for […]

To prove an agency decision is “arbitrary and capricious” under the APA, you must show the agency lacked a rational basis—failing to consider important factors, relying on irrelevant considerations, ignoring evidence, or inadequately explaining its choice. Courts generally uphold agency action if the record shows reasoned decision-making, but will set it aside when the agency’s […]